The Denver Nuggets Front Office: Smarter Than You Thought

[Note: Originally Posted 11-12-2008 at 01:28 AM by DenButsu]

At the end of the day, it’s all about the big picture.

The Denver Nuggets sent shockwaves through the NBA last summer when they pulled the trigger on the trade that most analysts and fans characterized as “giving Marcus Camby away for nothing”. And the general rap on the general management of the Nuggets was, “Wow, are they really that dumb?”

Well, with the passage of a little time, and the making of a few moves big and small in the interim, with that clear vision hindsight provides we can now answer with confidence: “No, they’re not.”

Think about this: The Nuggets, who last season were burdened with the league’s second highest payroll and the biggest playoff failure, looked like they were heading into the 2008-09 season at least$10 but probably closer to $15 million over the luxury tax threshold, armed with a tragically underperforming squad. But now they hold, respectably, the league’s 9th highest paid roster, and appear poised to actually get under the luxury tax by the trade deadline, which would locate them squarely in the middle of the NBA’s salary field. And here’s the kicker: For saving all that money, they just might be a better team now, too.

It’s clear now that the front office was given a directive by owner Stan Kroenke to make some dramatic moves and get under the luxury tax. If anybody had told me this before the offseason, and also told me that the team would actually be better off basketball-wise for these efforts, I’d have thought they were nuts. But now the FO is very close to completing this magic trick, and it’s a fairly impressive accomplishment. The so-called “3-headed monster” of the Nuggets GM trio has actually been quite shrewd.

Consider the moves they’ve made:

The Camby trade shipped out $10 million of salary without taking any back in return. This, simply put, is practically unheard of in the NBA, and I believe the move is actually the envy of many a GM in the league who is seeking to chop salary off the payroll. In return for Marcus, the Nuggets didn’t get “nothing”, but instead they got a $10 million trade exception with a more potent and flexible trade value (and durability) than Camby himself. And here’s a surprise for you: They’ve actually extended that exception 3 1/2 months through their crafty maneuvering in the Iverson trade.

What most people don’t know is that the Pistons trade was done in 3 parts (apparently this is allowed by NBA rules): AI for Chauncey, which gave Denver a $9.7 million trade exception good until November 3, 2009 (this supplants the original Camby TE); then part of the Camby exception for McDyess, which also leaves Denver with $2.52 million on that exception that can be used until July 15, 2009; and finally nothing for Cheikh Samb’s contract, which didn’t need to be directly exchanged for anything because it’s set at the minimum salary. In addition, in the subsequent buyout of McDyess’ contract, the Nuggets did some tough negotiating, finally reaching a buyout figure of only $6 million (split $3 mil/$3 mil over two seasons against the cap), well below the approximately $15 million originally due to McDyess. So if we look at the Clippers and Pistons trade as one combined entity, the Nuggets shipped out Marcus Camby and Allen Iverson for Chauncey Billups, Chiekh Samb, one $2.52 million trade exception good until 7/15/09, and one $9.7 million trade exception good until 11/3/09.

And while that might not seem to be very equitable at a superficial glance, look at the 2008-09 cap relief they gained in the process:

Code:
OUT:		
AI	20,840,625	
Camby	10,000,000	
Total	30840625	
IN:		
Billups	11,050,000	
Samb	711,517	
McDyess	3,000,000 (half the 6 mil that counts against the cap this season)
Total	14,761,517	

Savings	$16,079,108

Considering that the value of the $9.7 million trade exception exceeds the trade value of Camby at this point, and that the Nuggets will be in a financial position to actually use that exception next summer if they want to, they come out way ahead in terms of building for their future, and building a more balanced team that’s a better fit for Carmelo Anthony.

Two more aspects of all of this: First, the Camby trade salary dump allowed the Nuggets to extend J.R. Smith for nearly the MLE and still get nearly down to the luxury threshold after the Iverson trade. Second, instead of trying to re-sign Eduardo Najera, who ended up signing with the Nets at a salary of $3,300,000 this season, the Nuggets were able to sign Renaldo Balkman, Chris Andersen and Dahntay Jones for a combined total of a nearly identical $3,294,996, and they have proven to be more than capable of providing the same kind of energy, scrappiness and defense off the bench Eddie provided, but with more diversity (3 players at different positions) and in a way that helps Denver meet the minimum roster requirement of 13 players.

Now, the Nuggets have one final goal to accomplish by the trade deadline: To trade Chucky Atkins in a move that will reduce their payroll by more than the approximately $700,000 they currently are over the luxury tax threshold. Chucky’s contract goes through 2010, but only $760,000 of next year’s $3.48 million is guaranteed, so a team with a cheaper but longer term contract which they’d be willing to send out for quicker cap relief next summer (as well, possibly, as a draft pick) might be interested in trading for his otherwise worthless contract (“worthless”, assuming he remains plagued by injury, as he has for over a season now).

But beyond this, the Nuggets have greatly increased the stability and strength of their financial position by getting down to the luxury limit. They have vastly increased the flexibility of their 2009 offseason, with two trade exceptions they can use and 3 players on minimum contracts they can either let go of or extend, and one promising young player – Linas Kleiza – who will be a restricted free agent who they can either re-sign or use as trade bait.

And in the immediate present, they have effectively replaced Camby with Nene, who is already proving to be an upgrade overall, and Iverson with Billups, who looks very promising as the Nuggets’ new floor general who, while not carrying the scoring punch that Iverson brought, looks to be poised to help his teammates more than make up for it by bringing better balance, defense, chemistry and playmaking to the Nuggets.

Last summer, when you looked at the Camby trade and asked, “What were they thinking?”, well, this was it. Picking up AI when they could was totally understandable – they just had to give it a try when they had the chance. But that move threw the organizational direction in a tailspin, and nobody had any clear sense of where they were going with it. Now they’re back on course, with a well structured team anchored by a young core with a bright future, and supported by the newfound financial flexibility that will open up a much wider range of options moving forward.

—————————–

Props:
In writing this blog entry I was heavily reliant on the great work that Chris Tomasson has been doing over at the Rocky Mountain News in keeping us up to date on and breaking down Denver Nuggets trade and financial news. The two sources can be found here and here.

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